Encyclopedia of Investment Terminology

Bond

A loan by an investor to a corporation or governmental entity, which can be bought and sold. There are various types of bonds, such as corporate bonds, municipal bonds, government bonds, debentures, collateralized bonds, zero coupon bonds, and convertible bonds. In all cases, the investor provides a loan to an entity, for a fixed amount of time, at a specified interest rate, payable upon a specified period of time.